Correlation Between MCI Management and M Food
Can any of the company-specific risk be diversified away by investing in both MCI Management and M Food at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining MCI Management and M Food into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MCI Management SA and M Food SA, you can compare the effects of market volatilities on MCI Management and M Food and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in MCI Management with a short position of M Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of MCI Management and M Food.
Diversification Opportunities for MCI Management and M Food
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MCI and MFD is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding MCI Management SA and M Food SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on M Food SA and MCI Management is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on MCI Management SA are associated (or correlated) with M Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of M Food SA has no effect on the direction of MCI Management i.e., MCI Management and M Food go up and down completely randomly.
Pair Corralation between MCI Management and M Food
Assuming the 90 days trading horizon MCI Management SA is expected to generate 0.33 times more return on investment than M Food. However, MCI Management SA is 3.04 times less risky than M Food. It trades about 0.06 of its potential returns per unit of risk. M Food SA is currently generating about -0.06 per unit of risk. If you would invest 1,910 in MCI Management SA on September 14, 2024 and sell it today you would earn a total of 630.00 from holding MCI Management SA or generate 32.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 62.69% |
| Values | Daily Returns |
MCI Management SA vs. M Food SA
Performance |
| Timeline |
| MCI Management SA |
| M Food SA |
MCI Management and M Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MCI Management and M Food
The main advantage of trading using opposite MCI Management and M Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MCI Management position performs unexpectedly, M Food can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in M Food will offset losses from the drop in M Food's long position.| MCI Management vs. Immobile | MCI Management vs. Asseco Business Solutions | MCI Management vs. Asseco South Eastern | MCI Management vs. HM Inwest SA |
| M Food vs. PMPG Polskie Media | M Food vs. GreenX Metals | M Food vs. MCI Management SA | M Food vs. X Trade Brokers |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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